INVESTECH MODEL FUND PORTFOLIO ADJUSTMENT
As you’ll see in this month’s issue published later today, we are making the following adjustments to our Model Fund Portfolio to more closely reflect the allocation following year-to-date relative gains:
- The Van Eck Vectors Gold Miners ETF (Symbol: GDX) position has increased from 4% to 7%.
- The ProShares S&P 500 Dividend Aristocrats ETF (Symbol: NOBL) has decreased from 16% to 15%.
- The Energy Select Sector SPDR Fund (Symbol: XLE) has decreased from 6% to 5%
- The Consumer Staples Select Sector SPDR Fund (Symbol: XLP) has decreased from 7% to 6%.
It should be noted that gold has been our strongest performer this year, with the Van Eck Vectors Gold Miners ETF (Symbol: GDX) increasing more than +149% through yesterday’s close. While GDX has slipped this morning, giving back the last two days of gains, it has still risen over +130% year-to-date and our Model Fund Portfolio is up +8.9% – a remarkable performance considering our near-40% defensive Treasury position.
This is not a new recommended trade, but an adjustment to more closely reflect the allocation of the holdings in the Model Fund Portfolio. We continue to see value in all the carefully chosen components of the Portfolio and remain steadfast in our Safety-First Strategy.
The Model Fund Portfolio remains 57% invested in quality equity ETFs, 5% in an intermediate Treasury ETF, and 38% cash. The cash portion of the Portfolio (38%) is held in short-term Treasurys or a money market fund to provide an attractive yield and defensive buffer.
MACROECONOMIC UPDATE
- The National Federation of Independent Business (NFIB) Small Business Optimism Index declined 2.0 points to 98.8 in its latest release, while the Uncertainty Index spiked 7 points to 100 – its fourth highest reading in history.
- The National Association of Home Builders (NAHB) Builder Confidence Index increased slightly to 37 due to anticipation of the likely Fed rate cut at the end of the month. Even with this rebound, the Index sits well below the level of 50 indicating builders continue to feel pessimistic about the current and near-term outlook for housing.
TECHNICAL UPDATE
- InvesTech’s Negative Leadership Composite continues to not confirm a healthy bull market leg ahead, and recent internal data shows that Distribution could reappear in the coming weeks. This warning that the current rally is not supported by strong market leadership will be closely watched going forward.
- InvesTech’s Housing [Bubble] Bellwether Barometer saw a modest rebound following its -11% plunge last week but it remains dangerously close to its first critical support level.
Latest Issue of InvesTech Research available later today!
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